Japanese stocks rose for the first time in three days as signs Greece will reach a deal with creditors saw the euro gain against the yen, boosting the outlook for earnings at exporters.
Nippon Sheet Glass Co., which relies on Europe for nearly 40 percent of sales, jumped 1.4 percent. Insurance companies led gains in the Topix, with Dai-ichi Life Insurance Co. climbing 6.3 percent to a record. Nissan Chemical Industries Ltd. added 2.7 percent after Nomura Holdings Inc. raised its price target on the stock. Rakuten Inc., operator of Japan’s biggest Internet shopping mall, tumbled 6.2 percent after saying it will issue about $1.5 billion of shares in a public sale.
The Topix index climbed 0.2 percent to 1,673.89 at the close in Tokyo, paring gains in the afternoon after Chinese markets plunged. The Nikkei 225 Stock Average rose 0.1 percent to 20,488.19. The yen traded at 124.19 per dollar and 149.80 per euro. The euro gained after European Central Bank President Mario Draghi said inflation was on a firm trend and as investors speculated that Greece will reach an agreement with its creditors.
Positive developments in the euro area led “the euro to rise against the yen,” said Mitsushige Akino, executive officer at Ichiyoshi Asset Management Co. in Tokyo. “In the short-term, this should be positive for exporting stocks.”
The yen weakened 2.7 percent against the euro in the past two days. Losses accelerated after Draghi said inflation will quicken in the 19-nation euro area.
Dutch Finance Minister Jeroen Dijsselbloem said a Wednesday evening meeting with Greek Prime Minister Alex Tsipras was “good” and that talks between the Greek government and its creditors will continue “in a few days.” Tsipras said an agreement was “in sight” and that investors shouldn’t worry about an IMF payment his government is due to make this Friday.
“The Greek side does not want to leave the euro zone, so in the end I think they’ll come to an agreement,” said Isao Kubo, a Tokyo-based equity strategist at Nissay Asset Management Corp. “It’s unclear if anything will happen right away, but the end of June is the deadline and I believe they’ll reach a settlement by then,” he said, referring to the existing bailout which is set to expire by the end of June.
Stocks that rely on Europe rose, with Nippon Sheet climbing 1.4 percent after Wednesday’s 4.5 percent gain. Office equipment-maker Konica Minolta Inc., which counts on the region for nearly a third of sales, added 1.2 percent.
Insurance companies rose after Citigroup Inc. published a bullish report on the sector. Dai-ichi soared 6.3 percent to close at a record, while T&D Holdings Inc. jumped 4.2 percent.
Nissan Chemical added 2.7 percent after Nomura raised its price target 28 percent to 3,200 yen. The brokerage maintained its buy rating, citing growing profits.
Online retailer Rakuten dropped the most in more than a year after announcing it will sell shares mainly to pay down debt.
Japanese stocks pared gains in the afternoon after the Shanghai Composite Index plunged as much as 5.4 percent after a brokerage suspended margin financing for smaller companies. Golden Sun Securities Co. removed the companies from its list of shares eligible for margin trading Thursday, citing the gauge’s recent rally and high price-to-earnings ratios.
E-mini futures on the Standard & Poor’s 500 Index dropped 0.1 percent after the underlying measure gained 0.2 percent on Wednesday in New York.